The government is set to appropriate 10% of the fiscal 2020 budgets of each ministry for a central fund to fight the pandemic and rehabilitate the economy.
The plan is part of a third round of government measures to stem the impact of the outbreak. These measures will focus on people living in rural areas, and stabilising the financial and capital markets.
Deputy Prime Minister Somkid Jatusripitak said the central fund will be managed by Prime Minister Prayut Chan-o-cha, empowered by the state of emergency decree.
The total budget allocated to all ministries amounted to 1.98 trillion baht in fiscal 2020.
The Education Ministry had the largest budget at 368 billion baht, followed by interior at 353 billion, finance at 249 billion, defence at 233 billion and transport at 178 billion.
According to Mr Somkid, these contributions will be one of two key sources of funding to cope with the pandemic and revitalise the economy. The other is borrowing from domestic financial institutions.
The government may issue an executive decree or bill allowing this borrowing, he said, with responsible agencies working on the legality of appropriating the funding.
“The public debt-to-GDP ratio is 43%, well below the ceiling of 60% set by the government’s fiscal sustainability framework,” said Mr Somkid. “This allows the government plenty of room to increase public debt to help the rural sector and stabilise financial markets.”
Yesterday Finance Minister Uttama Savanayana, Bank of Thailand governor Veerathai Santiprabhob and executives of the Securities and Exchange Commission (SEC) reported to Gen Prayut on the progress made for the government’s plan to rehabilitate the economy, agreeing the third set of measures needs to be approved soon.
Mr Somkid said the public should not be too worried about the debt because the government’s fiscal and monetary status remains strong, with US$230 billion in foreign reserves.
“The government doesn’t need to borrow from the IMF and domestic financial institutions are flush with liquidity,” he said.
Meanwhile, Fiscal Policy Office director-general Lavaron Sangsnit said an additional budget for the 5,000-baht cash giveaway to people affected by the outbreak will be sought by the cabinet as the assistance was estimated to be offered to only some of 6 million self-employed workers under the Social Security Act’s sections 39 and 40.
“The 45-billion-baht budget already approved by the cabinet can accommodate 9 million people in the first month,” he said.
“The government has ample budget if the cash giveaway exceeds the 3 million people expected. We must wait on screening to know how many registrants are qualified for the cash handout.”
The screening process could take longer time than earlier anticipated — seven days — as the number of registrants is more than double the initial estimate at 10 million, said Mr Lavaron.
The government plans to give the cash handout to all recipients at the same time, he said.
Source: Bangkok Post